EUROCORP

Financial Morning News 30/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 528.14 posting profits of 1.86% in a turnover of €38.35mn.

The EC’s spokesperson for Economic and Monetary Affairs Mr. Amadeu Altafaj said that Greece needs to do more to clamp down on tax evasion, stressing that reform to the tax system is one of the most fundamental components of the country’s bailout agreement with its creditors. He added that there will be no mission to Greece from the country΄s official lenders until a new government is in place.

ECB Governing Council member Mr. Ewald Nowotny said that the prime objective is to keep Greece in the euro area, adding that this is something that doesn’t only depend on the side of the European authorities, but also on the decisions of Greek people and their government.

Corporate Releases

  • 05/30: NBG, Piraeus Bank, FF Group, MOH, Terna Energy Q1’12 results
  • 05/31: Alpha Bank, Eurobank Q1’12 results

Broker Meteorology

Credit Suisse estimates that If Greece were to exit the euro zone, the S&P 500 would likely fall to 1200, putting the probability of such an event occurring in 2012 at 20% vs.15% previously.

Corporate Impacts

  • Hellenic Petroleum: It reported net profit of €45mn (est: €28.2mn) for the first quarter (+1%), as cost savings helped offset slumping fuel demand. EBITDA were up by 4.2% to €75mn (est: €77.3mn). The start-up of the Elefsina refinery in the next few weeks will highlight a turning point for the group.
  • GEK Terna: Its subsidiary, Terna signed a contract of €21.7mn for the construction of the project Tirana Business Park in Albania.
  • PPC: It reported a €1.4mn net loss in Q1’12 (est: profits of €62.1mn) vs. a net profit of €93.3mn in Q1’11 due to higher fuel and energy purchase costs. The turnover increased to €1.55bn (est: €1.53bn) vs. €1.37bn, while EBITDA was €232mn (est: €304bn), down from €327mn. The Chief Executive Mr. Arthouros Zervos said that he expects full-year EBITDA margin to reach the budgeted level, as long as macroeconomic environment don’t deteriorate further.
  • Cyprus Popular Bank: It posted a 23% drop in first-quarter net profit at €54.8mn, as the worsening situation in the Greek market took its toll on the bank’s loan portfolio. The net profit included a deferred tax asset of €84.7mn relating to its massive write-down of GGBs (€2.8mn).Net interest income fell by 2% on a yearly basis, reflecting a deleveraging of its loan portfolio and lower deposit spreads. EBA expects the bank to replenish its capital by €1.9bn to reach a core tier 1 capital level of 9% June 30.

Technical

  • FTSE 20 June future: Support levels: 180-172-166. Resistance levels: 196-202-210.

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